$100M to $4BN in 10 years: the rapid growth of Tech Mahindra

Tech Mahindra was originally a joint venture between Mahindra & Mahindra and British Telecom, started in 1986 as an outsourcing firm.

After BT sold off its stake, Tech Mahindra became a successful company in its own right with a global reach. How has your legacy in telecoms helped you to win as an IT and networking services company?

As well as our own concerns, we inherited our legacy and core competence from BT. We inherited the competences of running a telco with an uptime of over 99.99% and doing it securely, making sure that every time you pick up a phone you have a dial tone. We had mastered the art of managing high-impact applications.

In 2004 and 2005, when we started providing services, the world around us started taking up 3G, and eventually 4G, and we were already leading the digital revolution. We have management who are very entrepreneurial, and who worked in partnership with telecoms companies around the world. In a lot of ways, we became a leader in telecom business solutions in a very, very short period. We took the company public in 2006, and it was one of the most successful IPOs on the Indian stock market. Our focus on cyber security and telecoms just worked to our advantage.

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The second turning point was in 2009, when we acquired a large company, Satyam. We saw the trend of consumerisation of IT and the convergence of enterprise and telecoms, and I think we needed a leg in the enterprise segment. Satyam was very good at engineering and was phenomenal in enterprise business solutions.

The third turning point was in 2016, when we acquired Pininfarina, an Italian car company famous for its engineering, design, styling and beautiful cars. With its legacy of 85 years, it helped us understand the balance between form and functionality.

Which technology or solution do you see making Tech Mahindra the most money over the next few years?

A seismic shift I see happening in the next few years is the Internet of Things. At the moment, we’re defining what the market needs and what our position should be, and we’re very excited about that. From 2005 to 2016 we’ve grown from 5,000 employees to 105,000, and from $100 million to $4.2 billion in revenue, with output in 90 countries and development centres around the world, including Brazil, which is where I continue to lose a lot of my money and sleep!

I’m trying to reach as many people as possible. The Internet of Things is a huge opportunity in terms of connecting people. The world is changing very fast, content delivery has changed in front of us, the way we pay for things is changing right in front of us. SMS got gobbled by WhatsApp, and with that SMS traffic dried up virtually overnight. So it’s about knowing where your opportunities are.

You need to start thinking about where the dosage is directly corresponding to your ailment.

You’ve recently agreed to buy UK-based processing platform company Target group for £122 million. How sizeable is your market in the UK, and what’s the difference for you between the two markets?

India as a country is now in a leapfrog stage. It has a population of 1.2 billion people, but the reality is that we have an addressable market of only around 300 million.

When I look at the UK population, the consumption pattern is entirely different. Though it might only be 60 million – when I look at the maturity of the UK banking market, tourism market, educational industry, e-commerce and start-up ecosystem – I think the UK is miles ahead. And there is a need for a lot of learning and participation between the UK and India.

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As one of the largest firms in India, what do you make of the Tata Steel crisis in the UK, where the steel manufacturer’s Indian parent company is being forced to cut its UK branch? Was this a bad move on the part of Tata?

Clearly, timing was not right in favour of the market. Nobody would have forecast this crisis, but the reality is that the steel industry tanked. I think Tata could have been patient about how to manage this crisis; I’m not usually in favour of amputation.

Getting rid of UK manufacturing is an easy amputation, but both Britain and Tata Steel should have sat down and worked together to see if something else could be done.

OK, so there is cheap steel coming in from other parts of the world, but if you want to protect local industry you have to be prepared to give some advantage to local industry. Currently, with steel prices everything is uneconomical. But I think that Britain’s manufacturing industry can be revived – every disruption is also an opportunity.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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